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National Agricultural Market (NAM)

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The National Agriculture Market (NAM) is envisaged as a pan-India electronic trading portal which seeks to network the existing Agricultural Produce Market Committees (APMCs) and other market yards to create a unified national market for agricultural commodities. NAM is a “virtual” market but it has a physical market (mandi) at the back end.

NAM was announced during the Union Budget 2014-15 and is proposed to be achieved through the setting up of a common e-platform to which initially 585 APMCs selected by the states are linked. NAM was launched on 14 April 2016 with 21 mandis from 8 States joining it and the first phase of connecting 250 mandies was over on 6 October 2016.

NAM will be implemented as a Central Sector Scheme through Agri-Tech Infrastructure Fund (ATIF).   The Department of Agriculture & Cooperation (DAC), Ministry of Agriculture will set it up through the Small Farmers Agribusiness Consortium (SFAC).  The Central Government will provide the software free of cost to the states and in addition, a grant of up to Rs. 30 lakhs per mandi /market will be given as a onetime measure for related equipment and infrastructure requirements. In order to promote genuine price discovery, it is proposed to provide the private mandis also with access to the software but they would not have any monetary support from Government.

An amount of Rs. 200 crore has been earmarked for the scheme from 2015-16 to 2017-18. This includes provision for supplying software free of cost by DAC to the States and Union Territories (UTs) and for cost of related hardware/infrastructure to be subsidized by the Government of India up to Rs. 30 lakh per Mandi (other than for private mandis).

The target is to cover 585 selected regulated markets across the country, with the following break-up:

The schedule for implementation was later revised as follows:-

The Scheme is applicable on All-India basis. There is no State wise allocation under the Scheme. However, desirous States would be required to meet the pre-requisites in terms of carrying out necessary agri-marketing reforms. For integration with the e-platform the States/UTs will need to undertake prior reforms in respect of

Only those States/UTs that have completed these three pre-requisites will be eligible for assistance under the scheme.e-NAM platform is connected to 250 markets across 10 States as of Oct 2016 (Andhra Pradesh (12), Chhattisgarh (05), Gujarat (40), Haryana (36), Himachal Pradesh (07), Jharkhand (08), Madhya Pradesh (20), Rajasthan (11), Telangana (44), Uttar Pradesh (67).

Benefits of NAM
NAM is said to have the following advantages:

Under Constitution of India, agricultural marketing is a state (provincial) subject. While intra-state trades fall under the jurisdiction of state governments, inter-state trading comes under Central or Federal Government (including intra-state trading in a few commodities like raw jute, cotton, etc.)[1]. Thus, agricultural markets are established and regulated mostly under the various State APMC Acts.
APMC Acts provide that first sale in the notified agricultural commodities produced in the region such as cereals, pulses, edible oilseed, fruits and vegetables and even chicken, goat, sheep, sugar, fish etc., can be conducted only under the aegis of the APMC, through its licensed commission agents, and subject to payment of various taxes and fee. The producers of agricultural products are thus forced to do their first sale in these markets. For more details on the issues surrounding APMCs and how it hindered the development of a national common market please see here.

Government has been working on the issues for internal trade reforms and making a common market for agriculture products across the country since 2012[2]. As a long term reform measure, Union Government had been nudging states to reform their APMC act and towards this end had formulated a Model APMC Act way back in 2003. Setting up of Spot Exchanges, was an attempt towards creation of a single market in the agricultural commodities in pursuance of the national agenda given by the Prime Minister in his address at the Agricultural summit in 2005. The Department of Consumer Affairs had conceived spot exchanges as an alternative marketing channel which would facilitate a transparent system of direct marketing. It was also to integrate the physical market spatially and temporally by integrating it with the futures market. However, spot exchanges soon landed up in trouble and the permissions were withdrawn in September 2014.

Union Budget 2014-15 (para 82) and Union Budget 2015-16 (para 33) had suggested the creation of a National Agricultural Market (NAM) as a priority issue and Economic Survey 2014-15 (Chapter 8, Vol 1) suggested several ways of implementing the same. On 2 July 2015, Union Cabinet unveiled its plan to go ahead with the project amidst the constitutional constrains as mentioned above, and brought out the broad guidelines of NAM as a central sector scheme.

1. Constitutional Provisions regarding Agricultural markets
Schedule VII of the Constitution of India details the allocation of subjects between the state and the Union Governments.
The subject “Markets and fairs”, is covered in entry 28 of the State List in the Schedule VII of the Constitution of India and hence, the intra-state commodity trading is subject to the regulation of the State Governments in their respective jurisdictions.
However, “inter-state trade and commerce”, is covered in the entry 42 of the Union List and hence comes under the purview of the Union / Central Government.
Entry 26 of the State List covers ‘Trade and Commerce within the State” but made it subject to the provisions of Entry 33 of List III (Concurrent list wherein both State and Union have powers) which is as follows:
33. Trade and commerce in, and the production, supply and distribution of,—
a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
b) foodstuffs, including edible oilseeds and oils;
c) cattle fodder, including oilcakes and other concentrates;
d) raw cotton, whether ginned or unginned, and cotton seed; and
e) raw jute.
Thus, the Parliament is competent to enact legislation covering trade and commerce – inter-state and intra-state in the above commodities. </span>

2. Source: PIB release of Ministry of Consumer Affairs, 18 October 2012

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